Lifestyle

Chile Quake Rocks Its Booming Wine Industry

Last week's Chilean earthquake damaged many wineries although current supplies should help avert significant disruption in export sales

Review by John Mariani

(Bloomberg) — Last week's massive earthquake in Chile caused widespread damage to the country's wineries, although current supplies should help avert significant disruption in export sales.

Losses may reach about $250 million, or about 12.9 percent of 2009's production, according to Rene Merino Blanco, president of Vinas de Chile, an association that represents more than 90 percent of the country's wineries.

Exports last year totaled 670 million liters valued at $1.36 billion. The 2010 harvest is just beginning, so production of wines for that vintage will be largely unaffected. The real damage has been to stocks of already finished or bottled wines.

Top producer Concha y Toro saw 3 of its 11 facilities heavily damaged. At Miguel Torres Chile, a spokesperson reported, "the losses are significant at the winery: around 300 casks smashed, one stainless-steel vat with a capacity of 100,000 liters has been cracked, losing all the wine, thousands of bottles destroyed. Luckily the main structure of the buildings has withstood the quake."

Miguel Torres Chile is one of the reasons why Chilean wines, with their high, consistent quality and moderate prices, will continue to have a major impact on the global market despite the quake's damage.

The family-owned company, whose vineyards in Spain date back 300 years, bought land in Maquehua, Curico, near the Andes in 1979 and has been the country's bellwether winery ever since. It was the first in Chile to introduce stainless-steel cold fermentation tanks and French oak barrels for aging red wine.

Sales Rise

From 2004 to 2008 Miguel Torres Chile's sales rose to 11.24 million euros ($15.3 million) from 8.38 million euros ($11.4 million), making it the second-largest unit of the company. Of the 3.9 million bottles (about 325,000 cases) produced in 2008, 82 percent were exported to more than 80 markets.

The company's mission has been to find the most productive soils for individual varietals. It is in the forefront of organic viticulture with its Las Mulas line.

Tradition and heritage may be the backbone of winemaking, but it is youth that drives the future. In the case of Miguel Torres Chile, the appointment of fifth-generation scion Miguel Torres Maczassek, 35, as executive president, has given the winery much of its current vigor. (His sister Mireia, 39, is technical director of Miguel Torres Chile & Spain.)

Business Studies

Torres, who previously was the company's marketing director in Spain, studied business at Kenan-Flagler Business School in Chapel Hill, North Carolina, received his MBA from ESADE Business School in Barcelona, and studied enology at the Universitat Rovira I Virgili in Tarragona. Speaking six languages including Japanese, Torres seems to have world conquest on his mind.

I met with him just three days before the earthquake struck, while he was on a business trip to New York. We had dinner at New York's La Fonda del Sol restaurant, where chef Josh De Chellis matched his highly imaginative cuisine to 12 wines — bay scallops with tomato and saffron; tuna tacos with avocado, jalapeno and pickled onion; and beef cooked on a barrel stave soaked in red wine and Scotch.

One of the real surprises was a sparkling Espumante made from Chile's workhorse grape pais (also called mission). It was a bright, brisk bubbly I would gladly drink as an aperitif.

'An Experiment'

"This wine is an experiment," said Torres. "We wanted to see if this old, widely planted varietal could work as a fine wine, and if it succeeds, it will enable us to pay the workers more money to harvest it." He plans to release it in a year or so, at $12-$15.

I also tasted the fresh, grassy 2009 La Mulas Sauvignon Blanc and a mediocre, sweet 2009 rose made from cabernet sauvignon. I moved on to a series of reds, beginning with the 2008 Las Mulas 100 percent cabernet, whose youth was actually a bonus in a wine of medium body and ready to drink. The Las Mulas wines retail for $11.

Three other cabernets showed how their wines change with vintage and age. With ideal weather in 2006, the Manso de Velasco ($37) was macerated on the skins for an entire month, its tannins still tight and way up front, so that it will be better judged in two to five years. The 2003 ($37) was much more aromatic and its tamed tannins gave way to a full-fruited intensity and complexity.

Dry Year

The tough-to-find 1997 was the driest vintage in the winery's history, and it proved the old adage that grapes must suffer to produce great wines. This was a superb cabernet, rich in minerals and spice, mellowed by age, and balanced throughout.

The final wine, to be released next year (no price yet), was Torres's new showpiece: 2009 Empedrado, a 100 percent merlot made on difficult-to-harvest terraced, slate based soils called 'piedra laja.' It's a massive wine at the moment, very rich, and, like the best out of California, demonstrates the power of merlot. Torres also believes these vineyards in Constitucion are prime terroir for pinot noir, which the company has also planted.

These wines are impressive not just for their soundness and varietal expressiveness but for their reasonable alcohol levels — none above 14 percent — and prices. They are in the sweet spot right now and they should be there for a long time to come.

(John Mariani writes on wine for Bloomberg News. The opinions expressed are his own.)

To contact the writer of this column: John Mariani at john@johnmariani.com.